The Texas TGV project, cancelled in August of 1994, was to connect the
"Texas Triangle" (Dallas - Houston - San Antonio) with a privately
financed high speed train system.

The Texas High Speed Rail
Authority awared a fifty-year high speed rail franchise to the Texas
TGV Corporation on 28 May 1991. Texas TGV was a consortium made up of
Morrison Knudsen (USA), Bombardier (Canada), GEC-Alsthom (France/UK,
builder of the TGV) and a group of financial institutions comprising
Crédit Lyonnais, Banque IndoSuez, Merril Lynch, and others. Texas
TGV won the franchise after over two years of litigation opposing it to
a rival consortium backing German ICE technology. The franchise covered
the design, construction, ownership and operation of the high speed rail
system.

Texas TGV agreed to secure funding for the project entirely from private
sources, since the state of Texas did not allow the use of state
money. The project, with an original estimated cost of 5.6 billion
dollars, got off to a rocky start. The first job was to conduct an
environmental impact study, for the sum of 170 million dollars. The money
proved difficult to assemble, and Texas TGV was granted a one-year
extension by the Texas High Speed Rail Authority. This extension expired
on 31 December 1993, and in the last few weeks leading up to it there was
a mad scramble to secure the money.

At this time, the Warburg bank of London was able to issue 200 million
dollars in bonds to finance the project. These bonds were purchased by
European investors with the understanding that after two years they would
either be payed back by Morrison Knudsen (in charge of the civil
engineering for the project, including the environmental impact study) or
converted into shares of the Texas TGV Corporation. Two days before the
evaluation meeting of the Texas High Speed Rail Authority, Morrison
Knudsen's Bill Agee made it known that his company would not guarantee the
bonds. The financing fell through, and the project sailed past the
deadline without any money in sight.

In the meantime, the project's overall estimated cost soared to 6.8
billion dollars. Southwest
Airlines, a low-cost airline serving the short haul market in the
Texas Triangle, lobbied hard against the Texas TGV project, since it was
clear that Southwest's business in the area would be drastically
impacted. Southwest was started on the Texas Triangle in 1971.

In August of 1994, the state of Texas decided that the Texas TGV
Corporation had failed to live up to its promises, and withdrew the
50-year franchise for high speed rail development. By this time, the
consortium had invested about 40 million dollars.